Erbe: Women are making gains in finance

After covering women in finance for almost two decades, I smell a revolution in the works.

Two new surveys show women are kicking the behinds of the financial industry’s male-dominated hierarchy.

A report released earlier this month by the financial-services firm Rothstein Kass reveals that female hedge-fund managers leveraged an average 8.9 percent return in the third quarter of 2012. A separate report from Hedge Fund Research showed that, globally, hedge funds averaged a mere 2.69 percent return during the same period.

This great news turns on its head the conventional view of women as averse to risk-taking and afraid to trust their gut instincts when it comes to investing.

But then there’s the Prudential Financial Inc.’s report on women’s financial experience and behaviors. Its 10th-anniversary edition, released last summer, displays a more traditional view of women as timid investors in need of guidance. Among the findings:

-- “Women are not confident about making financial decisions, and do not fully understand many of the increasingly sophisticated financial products that are available.”

-- “Fewer than two in 10 women feel ‘very prepared’ to make wise financial decisions. Half indicate that they ‘need some help,’ and one-third feel that they ‘need a lot of help.’ “

-- “Nearly nine in 10 of those who are looking for a lot of help need guidance on how to choose financial products. ... They say their knowledge of annuities, mutual funds and individual securities is limited.”

Granted, I’m picking and choosing these findings; the Prudential report also had some au courant findings about women investors that I’ve left out.

In general, the notion of white-gloved ladies too frail and feeble to fend for themselves in the cutthroat world of finance is giving way to new trends showing that, both as personal investors and as high financiers, women are much more emboldened. They can now take on and even beat investment decisions made by men.

Last November, the online broker TD Ameritrade released a survey of female investors in the United States, the United Kingdom and Canada that found “the majority of self-directed women investors feel they’ve been successful at closely matching or outperforming the markets over the last two years.”

Among its U.S. respondents, 81 percent “say they’ve consistently outperformed or performed close to the market over the last two years.”

So we have two recent surveys showing that women are making strides as individual and as institutional investors. Why, then, are women still rarely appointed to Wall Street’s very top jobs?

It seems very similar to the situation facing women in politics. Until quite recently, it was extremely difficult for women candidates for federal office to raise enough money to make credible runs for office. But that seems to no longer be the case.

“Studies generally show that women, especially those who become general election candidates, raise as much as men when they are of the same party and run in similar types of situations,” says a report released last year by Political Parity, a nonprofit organization that tracks women’s progress in elective office.

So money, which used to be a major problem for women candidates, is no longer much of an obstacle. The same track is being trod by women on Wall Street, but Wall Street is just slower to catch on.

That said, the pressure’s on. The glass ceiling holding back Wall Street women is starting to crack and is on its way to bursting open. As long as women hedge-fund managers can beat by big numbers the returns produced by other hedge funds, how long will it be before investors recognize this and switch funds? Not very long, I’m going to wager.